to Essential Services Commission on the Vocational Education and Training Fee and Funding Review 24 June 2011 1
Contents About HIA... 3 Principles for the review... 3 The VET Sector:... 3 The National VET Reform Agenda... 4 Ensuring better outcomes and value for training funding... 4 Eligibility criteria under the Victorian Training Guarantee (VTG)... 5 Priority for funding... 6 Tuition Fees... 6 Student contact hours funding model... 6 Nominal Hours... 7 Conclusion... 7 HIA : Gil King Regional Executive Director Housing Industry Association Victoria Phone: (03) 9280 8200 Email: g.king@hia.com.au 2
About HIA HIA is the leading industry association in the Australian residential building sector, supporting the businesses and interests of over 43,000 builders, contractors, manufacturers, suppliers, building professionals and business partners. HIA members include businesses of all sizes, ranging from individuals working as independent contractors and home based small businesses, to large publicly listed companies. 85 per cent of all new home building work in Australia is performed by HIA members. HIA also promotes policies that enhance our members business practices and for that reason HIA has been at the forefront in providing resources to assist skills development strategies to provide the workforce of the future. Principles for the review HIA supports the principle of certainty with respect to ensuring providers are adequately funded with structured payments that take into account VET attrition rates of students during training. Many students enroll in training with the best intention but because some content is irrelevant, they lack the fortitude to maintain their enthusiasm or are distracted or possibly persuaded to take a different career path and through no fault off the RTO, they do not complete their course. Any proposed funding structure needs to take this into account and ensure the RTO is not disadvantaged to the extent they must absorb losses through a heavy weighting of the total funding amount only being paid on total completion of a course. HIA strongly supports that funding must cover course delivery costs and a correct return for successful completions. A funding model that is based purely on units completed, as has been raised in some forums, should be questioned. The VET Sector: As indicated on page 5 of the issues paper, the Victorian VET sector is made up of 1200 private providers, including 300 Adult and Community Education providers. At the end of 2010, 345 of these providers reported receiving government funding for training delivery. 57 percent of the 582,000 enrolments were funded and although this is an increase from 2008 it is not clear as to whether the gap in access to funded places is due to the qualifications offered or restrictions placed on participant eligibility, should be further explored. A conclusion drawn from the lack of access to funded training places by private registered training providers could be a lack of eligibility to submit applications, or alternatively, a lack of understanding of the procedure or a combination of both. Either way a consideration of the nature of these barriers could provide opportunities for RTOs to provide a greater offering of funded places and skills development as was the intent. 3
The National VET Reform Agenda The issues paper acknowledges the National VET Reform Agenda, however HIA would argue that there needs to be consideration at the State level of not just the VET funding but also the post VET funding structure in Victoria. With VET in schools and partnerships with industry (and potential employers) set to grow, then the post VET offering need also to be considered. An implication of the design of Victoria s funding mechanisms and fee structures especially with the evaluation criteria of the post VET Productivity Places Program and the Skills for Victoria EOI s, is the potential for many post VET industry run pathways to be excluded. Currently a number of RTO s are excluded from accessing many national funding programs, such as the Productivity Places Program in Victoria, because of the evaluation criteria. HIA is a Registered Training Organisation (RTO) registered in South Australia to deliver, assess and issue national qualifications that it has within its scope Australia wide. Of major concern to HIA members is their inability to access training for approved courses from their industry association notwithstanding it is a nationally recognised RTO. This shuts down many post apprenticeship opportunities and goes against several COAG principles. In particular this evaluation requirement contradicts the Commonwealth and State endorsement in 2008 of the National Agreement for Skills and Workforce Development COAG reform objectives to Reduce Barriers and to encourage the Contribution of Australian Industry. With many other RTOs excluded due to this evaluation criteria, the potential for successful commonwealth training funding reaching the individuals to acquire and utilise new skills within their lifelong learning journey is diminished. This evaluation criteria actually creates a significant barrier to training receipt. Federal reports by Skills Australia, as the principle adviser to the Federal Education and Employment Ministers, call for greater competition with recipients of training having greater access to training options over their career. To this consideration, HIA believes that the system should be capable of delivering worthwhile skills outcomes at all levels throughout the learning journey, with immediate personal benefits and economic value for Victoria being created as a result. HIA believes that the overall capacity of the publicly funded training system will continue to grow and that requires more providers in the market. The outcome will see that the training offer will reaching more Victorians with a wider range of needs. Ensuring better outcomes and value for training funding Improving the relationship between the trainee, the RTO and where appropriate the trainees employer, will achieve a better outcome from training funding. 4
An efficient and effective VET framework requires an appropriate balance between the needs of the individual and the capacity of the system. Recognising the individual scope and career goals of trainees, short, medium and long term is paramount It is common for trainees to register for courses with little regard to whether they need to undertake all of a qualification s content to gain the required skills for a desired task or job role. HIA believes this supports research that reports a large number of people not utilising the skills they learnt that was included in the training completed. To improve the VET experience requires that the training being undertaken is relevant to the trainee. The training and assessment must therefore relate to a trainee s job and have relevance to their work functions. If a trainee says I can t see the relevance of this there is a good chance they will discontinue training, causing a detrimental outcome for all stakeholders. In addition to policy which provides solutions to increase skilled numbers there is a distinct need to look at promoting the uptake and funding of skill sets across all potential streams. Where required by employers, the delivery of training for skill sets or particular work functions could be achieved through additional government funding for the delivery of skill sets and allow successful applicants to contract course delivery directly with a Registered Training Organisation (RTO). Funding would need to be available also to manufacturers who require skilled workers to apply or install products, or groups of employers or their representative associations to ensure viability of program delivery. An example might be that water proofers are in short supply. Existing contractors might not want to increase the size of their business or if they are a one man enterprise, to employ workers. It should be possible for funding to be accessed by a manufacturer, or a number of them working together, or industry associations and RTO s to increase the number of workers in the industry with the particular skill set required. Importantly for the worker, they will achieve certification for the units completed, providing a credit towards a full qualification should they decide to progress and access broader skills development. HIA recommends therefore that a pool of funding be made available for specific programs that meet identified needs, using units of competency that can be used to build towards a full qualification. Eligibility criteria under the Victorian Training Guarantee (VTG) HIA strongly recommends that the current eligibility criteria that restrict funding to Victorian registered RTO s is widened and that all RTO s, whether registered in Victoria or by the new national regulatory authority, are able to provide approved government funded training. Eligibility criteria should be extended to include mature age students seeking a career change or wishing to restart their careers regardless of prior qualifications. Information needs to be 5
provided to private training providers on how the VTG works and is implemented; again a streamlined process needs to be adapted. Priority for funding HIA agrees with the principle that funding of training should be used to increase the workforce participation rate, to ensure an adequate number of skilled workers are available as well as help provide individuals with the ability to enhance their career opportunities. It is important therefore that funding allocation takes into account the need to skill workers in the jobs where there is a skill shortage. It is therefore recommended that a mechanism is developed that retains the focus of the current policy to fund eligible individuals but also is able to provide the necessary funding to attract and deliver skills development for the skill shortage occupations. Tuition Fees HIA would be interested to further consider the idea to discount tuition fees as an incentive for undertaking skills development in skill shortage occupations. This would be particularly useful to attract those currently not in the workforce and potentially remove a financial barrier to their entry. It is also necessary to ensure VET school students are not disadvantaged through a fee structure by schools or RTO s who deliver in partnership with schools. Particularly where students do not undertake paid work as part of their training this would be a burden to many families in this stage of their education. Student contact hours funding model Current VET policy systems can appear to be a means for the generation, organisation and distribution of resources. The current VET effort is measured, and publicly reported against a narrow set of inputs, outputs and outcomes, with primarily one outcome, student contact hours (SCH) being dominant. This provides incentives for quantity but can be a disincentive for quality. It rewards growth irrespective of value. This is particularly so for TAFE colleges and large private training institutions whose success is often measured by the number of SCH delivered. As earlier Queensland report stated that approximately 77% of almost two million people who accessed publicly funded VET training between 1996 and 2005 did not complete a full VET qualification. Yet because of the high SCH delivered, this would have been reported as a successful outcome. 6
As previously stated, it is common that trainees register with little regard to whether they need to undertake all of a qualification s content to gain the required skills for a particular job role. A difficulty that will need to be addressed is the fact that trainees may aspire to a Qualification Certificate on completion when a Statement of Attainment for units completed is sufficient for the skills required. Promotion of training in skill sets and the ability to build to a qualification must receive a greater focus and provide better student outcomes as well as the use of scarce funds. HIA recommends that the funding of training needs to be better balanced between base funding support to cover the costs associated with delivery and assessment and additional performance funding support to ensure improved outcomes, rather than as is commonly the case, SCH s. Nominal Hours Additionally HIA requests that the nominal hours allocated to units of competency within qualifications are reviewed to provide a better level of consistency between the States and Territories. HIA is aware that the Victorian purchasing guide is used in many other jurisdictions; however there are currently wide fluctuations in the nominal hours for many of the same units in jurisdictions that do not utilise the Victorian Implementation Guide. An outcome s based measure is a far better measure than the number of hours a student has been enrolled in to undertake an area of study. Commencement and completion measures should be a minimum. Completion rates are influenced around flexibility, assistance given and time. Conclusion HIA believes that there is a range of reforms to be considered for the Victorian VET fee and funding structures as well as addressing system inefficiencies and RTO exclusion requirements. HIA would welcome to further discuss matters stated throughout this brief submission. 7